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By James Farol Metcalf

ABC 6:30 News Washington

December 9, 1987

Peter Jennings

"Our next report is a reminder that even as Gorbachev and Reagan talk of arms control,
the struggle between the two nations to get an edge in military technology has hardly
missed a beat. As ABC's John Martin reports tonight, a series of costly mistakes
apparently has given the Soviets a key piece of American military know-how."

"It's one of the most important materials in nuclear weaponry used in the nose cones
of America's intercontinental missiles. On the wings and the nose of the space shuttle."

"Because of its unique properties, it burns uniformly when missiles reenter the atmosphere.

Without it, the missiles can wobble and fall off target. With carbon-carbon,
American missiles are believed to be three times more accurate than Soviet missiles.

But now, because of a bureaucratic blunder, here and also in Great Britain, the Soviet
Union has managed to acquire key elements of America's missile technology."

Richard Perle

"Carbon-carbon technology is right up there among the most serious losses that we have
sustained in recent years."

"Today, a house sub-committee closed its doors in secrecy to call military and
intelligence experts to find out how this could have happened."

Bliley, Republican, Virginia

"A major scandal, and one of the greatest losses of technology we have ever had."

Dingell, Democrat, Michigan

"The matter lay idle in the hands of the CIA for six or seven months, during which
time nothing was done to address the problems."

"What the Soviets got were furnaces and presses to heat and form the material.
They came from the British subsidiary of this New Jersey firm called Consarc. This man,
James Metcalf,
meeting with Soviet technicians in Scotland,
agreed to sell them nine vacuum induction furnaces and two isostatic presses in 1983."

Metcalf

"The approval was written by the British Government, and it was verbal from the
U.S. Government."

John Martin

"U.S. Commerce officials approved the sale without seeing its national security
implications. Then it took a year for CIA and Pentagon officials to learn of the
deal. They reacted with alarm. They asked Britain to stop the sale. A year later,
Secretary of Defense Weinberger told Congress it had been stopped just in time, but
as it turned out, Metcalf, married to a Soviet woman, had already shipped most of the
equipment."

"This sketch,
smuggled out of the Soviet Union, is said to be the design of a factory near Moscow.
Experts believe it can make carbon-carbon."

"So behind the symbolism of the summit, the superpower race for even the slightest
edge in strategic missiles goes on relentlessly on both sides of the iron curtain."